Members of the men’s 4x100m freestyle relay team will face a Swimming Australia integrity panel inquiry following admissions of misbehaviour and unauthorised drug use at a team bonding session at Manchester before the London Olympics.

The Australian Olympic Committee also said on Friday it has decided to hire a Queens Counsel to investigate the drug incident and other allegations of misbehaviour within the Australian Olympic swimming team.

James Magnussen and four other members of Australia’s 4x100m freestyle relay team - Tommaso D’Orsogna, Cameron McEvoy, Eamon Sullivan and Matthew Targett - confessed earlier on Friday to taking the sedative Stilnox as part of a ‘‘bonding session’’ at a pre-Olympic camp in Manchester.

The sixth member of the squad, James Roberts, said he had never taken Stilnox in his life.

AOC secretary-general Craig Phillips said five swimmers faced possible sanctions from the Olympic body, including withdrawing funding in the lead up to the 2016 Rio Olympics.

The AOC could also ask for money paid under the medal incentive scheme to be returned, meaning Magnussen could be forced to pay back $10,000 given to him for winning a silver medal at the Games.

Phillips said the AOC would await the outcome of Swimming Australia’s newly-formed integrity panel.

‘‘As a result of the revelations this week arising from the swimming reviews, the AOC has decided to engage a Queens Counsel to investigate these incidents further,’’ Phillips said in a statement.

‘‘We would fully expect that the athletes will give their total cooperation to any investigation we mount.’’

In statement read out by Australian Swimmers Association chief executive Daniel Kowalski at a seperate press conference on behalf of the swimmers, the squad admitted to taking Stilnox after a training session.

The pills were prescribed to Sullivan and Targett and the scripts were filled before the team left Australia and before the AOC announced that team members were banned from using the drug about three weeks before the Games.

The team admitted that they used the drug in knowing it was banned by the AOC.

"We all acknowledge that at the time Stilnox was consumed, it had been recently prohibited by the AOC,’’ Kowalksi read.

‘‘We own up to it ... and are deeply sorry for it.’’

The team admitted some of them played pranks on other team members such as knocking on their doors but denied entering any rooms of teammates, and said they were all in bed by 10.30pm.

The swim team’s head coach Leigh Nugent was told of the pranks the following morning.

VIDEO: Former Olympic swimmer Lisa Curry says girls "don't find it very funny" when male swimmers misbehave and in her day they "would have been sent home".

Five of the freestyle relay squad members admitted to all taking one Stilnox tablet during their bonding session. Favoured to win the gold medal in London, a team of Magnussen, Targett, Sullivan and Roberts swam the final and finished fourth.

The swimmers believed the bonding session was ‘‘harmless fun’’.

World 100m champion Magnussen and Sullivan insisted taking Stilnox had no effect ‘‘at all’’ on their swim performances in London.

Magnussen said the prescription drug was taken ‘‘to bond with these guys’’.

‘‘In hindsight it was a ridiculous choice and ridiculous method ... but I don’t feel it affected my performance,’’ Magnussen said.

The revelations came a day after Swimming Australia (SA) created its integrity panel in the wake of two damning reviews released publicly on Tuesday. One review, into culture and leadership, found a ‘‘toxic’’ culture cruelled Australia’s swim team at last year’s London Olympics.

Australian swimmers won just one gold, six silver and three bronze medals at the London Games, the lowest tally in the pool in two decades.

The nation also failed to produce an individual gold medallist for the first time since the 1976 Montreal Olympics.

The review cited incidents of ‘‘getting drunk, misuse of prescription drugs, breaching curfews, deceit, bullying’’ which were not addressed by team hierarchy.

A separate review, into swimming’s governance and high performance program, identified shortcomings including a lack of clear national vision and poor accountability, transparency and communication.

It also found Swimming Australia’s board was unable to deal with issues and made 35 recommendations to improve governance and the high performance program.